Question

Financial Statements of a Manufacturing Firm The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:

a. Purchased $48,700 of materials

b. Used $37,500 of direct materials in production.

c. Incurred $56,000 of direct labor wages.

d. Incurred $78,900 of factory overhead.

e.Transferred $131,000 of work in process to finished goods.

f .Sold goods for $234,200.

g. Sold goods with a cost of $104,200.

h. Incurred $59,900 of selling expenses.

i. Incurred $26,300 of administrative expense.

Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. Digital Vibe Manufacturing Company Income Statement For the Month Ended January 31 $ $ Operating expenses: $ Total operating expenses $

b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations. Digital Vibe Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials $ Work in process Finished goods

Answer 1

Income Statement:
Sales revenue				234200
Less: Cost of goods sold				104200
Gross Profit				130000
Operating expenses
Selling expenses			59900
Admin expenses			26300
Total Operating expenses				86200
Net Income				43800
RAW MATERIAL INVENTORY
Balance		0	Work in process		37,500
Accounts Payable		48,700
Ending Balance		11,200
WORK IN PROCESS INVENTORY
Balance		0	Finished Goods Inventory		131,000
Raw material inventory		37,500
Wages payable		56,000
Manufacturing Overheads		78,900
Balance		41,400
FINISHED GOODS INVENTORY
Balance		0	Cost of Goods sold		104,200
Work in process inventory		131,000
Balance		26,800
Ending inventories are as under:
Raw material inventory			11200
Work in process inventory			41400
Finished Goods inventory			26800